Calculate your take home pay (that's your salary after tax), with the Japan Salary Calculator. A quick and efficient way to compare salaries in Japan, review income tax deductions for income in Japan and estimate your tax returns for your Salary in Japan. The Japanese Tax Calculator is a diverse tool and we may refer to it as the wage calculator, salary calculator or after tax calculator, it is however the same calculator, there are simply so many features and uses of the tool (income tax calculator, there is another!) that we refer to the calculator functionally rather than by a specific name, we mention this here to avoid any confusion.
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Follow these simple steps to calculate your salary after tax in Japan using the Japan Salary Calculator 2023 which is updated with the 2023/24 tax tables as published by the Japanese National Tax Agency (国税庁)
That's it! Just four simple steps to calculate your salary after tax in Japan with detailed income tax calculations. Need more from the Japan Tax Calculator? More detailed salary calculator or a wage calculator? Simply select 'advanced' to access more features of the tax calculator.
In addition to the features and options described above, the Japan Tax Calculator also has the following features:
Japan is a country in East Asia. It is an island located in the Pacific Ocean. The literal meaning of the word 'Japan' mean sun origin and it is also known as the "land of the rising sun"
Japan has a highly developed economy that stands at the second, on the list of largest developed economies in the world. Japan has the third largest automobile manufacturing industry and has the largest electronics goods industry in the world.
Various kinds of taxes levied in Japan are explained ahead in this article.
Tax Administration in Japan is managed by the National Tax Agency (NTA). The agency is responsible for revenue administration and tax collection in Japan.
The NTA was organized in 1949 as an external organization of the Ministry of Finance. There are other departments that work alongside NTA, The National Tax Collage which trains tax officials, while the National Tax Tribunal works for examining requests review that are received from taxpayers.
Compliance and filing requirements for individuals
Tax year for Individuals is the same as the calendar year from 1 January to 31 December.
For employment income, the employer is required to withhold the income at source.
Tax returns have to be filed by 15 March of the following year on an individual base, consolidated returns are not permitted. Penalties may be imposed for failure to comply with tax laws.
Permanent residents are taxed on worldwide income and a nonresident is subject to PIT only on his Japan-source based income or foreign income that is paid or remitted in into Japan. Individuals earning income from business are taxed as per corporate income tax regime.
Most income, including employment income, such as salary, bonuses, and investment income like stocks and bonds, and other benefits in kind (except some specific items) are regarded as taxable income.
The latest Personal Income Tax (PIT) rates are avialable in the Income Tax Tables for Japan
Notes: From 1 January 2013 a surtax of 2.1% are added to the national tax.
The rates below are excluding Japan Municipal Tax and Prefectural Tax
Non residents in Japan are taxed at the standard rate of 20% plus 2.1% surtax. Additionally, they may be subject to the local inhabitant's tax at 10% if they are registered as a resident as of 1 January of the current year.
Capital gains from the disposal of immovable assets (investments) are taxed at a flat rate of 20%. Capital gains from real estates are taxed at 20%. Short term gains are taxed at 39%
This tax is imposed by the Municipality in Japan. This is assessed at 1.7% per year, including city planning tax. A real estate acquisition tax 3% to 4% applied to the assessed value at the time land and buildings are acquired.
A real estate registration tax applied to the assessed value of real property at rates ranging from 0.4% to 2%, depending on the type of transfer.
Progressive rates ranging from 10% to 55% apply on Inheritance, estate and gifts in Japan.
Deduction and allowances are available on social insurance premiums under Japanese government plans, life insurance, earthquake insurance, charitable payments qualified medical expenses etc. Provided they meet the defined conditions.
Exemptions are available for elderly and disabled. Personal deduction is allowed for dependent spouse and children over the age of 16 and above. This can be claimed only if individual income does not exceed JPY 10 million.
Compliance and filing requirements for corporations
The tax year is generally calendar year. However, corporations may opt for a different tax year at the time of incorporation, this should not exceed 12 month period.
Japan operates on a self assessment regime. Generally, CIT returns have to be submitted within 2 months following the company's fiscal year end. Taxes must be prepaid within 2 months after the sixth month end of a calendar year. This is either based on 50% amount of previous year's tax amount or actual tax liability for the 6 months of the current year.
Companies are allowed to file a 'blue' tax return, provided they apply before each tax year beginning, or for new corporation after the first year ending, along with meeting certain requirements on accounting system and record keeping. Filing 'Blue' tax returns comes with various benefits that include, deduction, loss carry forwards and accelerated depreciation.
Consolidated returns are permitted, provided they meet defined conditions. Penalties may be imposed for failure to comply.
Resident companies are subject to CIT on worldwide income and nonresident companies are subject to CIT only on Japan-source based income. Branches are taxed in the same way as subsidiaries. Income generated by permanent establishments of foreign companies in Japan, are subject to CIT.
The taxable income in each accounting period is a gross taxable revenue minus deductible expenses. Gains or losses occurred due to transfer between 10% subsidiaries are not recognized in taxable income.
A standard corporate income tax rate is 23.2% applies to the companies that operate in Japan with a share capital over JPY 100 million.
Local inhabitants tax is levied by both prefectures and municipalities that is payable by the companies.
Additionally a local enterprise tax is also levied by the prefecture on corporations.
The effective rate for a corporation for a company that is based in Tokyo with a paid up capital of JPY 100 million is approximately 30%
Foreign tax paid may be credited against Japanese tax, subject to certain limitation.
Various tax incentives are available, including a tax credit on research and development (R&D) Credit under the tax incentive regime This is with the exception of some large corporations that do not satisfy certain conditions for the tax year that start between 1st April 2018 and 31 March 2021.
Tax incentives can be availed on increase of wages and salaries in the tax year that starts between 1st April 2018 and 31 March 2021.
Dividends paid to nonresidents are subject to a 20% (plus 2.1% surtax) withholding tax. The rates may be reduced If they fall under tax treaties. A reduced withholding tax of 15% (plus 2.1% surtax) is applicable to the dividends paid to nonresidents by a listed company.
Royalties & Interest are subject to a 20% withholding tax unless they fall under tax treaties. A 2.1% surtax effectively increases the local tax to 20.42%
Rental income for corporations is treated as normal business income.
This is subject to withholding tax of 20% on Japan sourced service fee, unless reduction or exemption is provided under a tax treaty.
This tax is imposed in a similar way that of Individuals (Please refer real property tax on individuals)
This is included in the local inhabitant tax collected from the enterprises.
The tax amount is generally based on the amount stated in the documents, this varies between JPY 200 to JPY 600,000. Additionally, this is levied on the transfer of assets as well.
A customs duty is levied on imported goods based on customs tariff table.
This is levied on products such as: Alcoholic beverages, tobacco products, gasoline and aviation fuel.
Japanese consumption tax is similar to a Value Added Tax (VAT) in European countries. Consumption taxes are generally applied for:
The standard rate is 8%, including the national & local tax rates. This will be increased to 10% effective 1 October 2019 with exception of some food and non alcoholic drinks and newspapers that are issued more than twice a week.
The new companies with share capital under JPY 10 million are exempt from consumption tax. Old companies may choose to be a consumption taxpayer. Other than this, no registration procedure exists.
The consumption tax returns must be fined and the payments are directly remitted to the tax authorities by the consumption tax payers.
Social security contributions are mandatory for both employers and employees. The employees are liable to contribute towards social insurance premiums that have various components. The highest combined employer potions are approximately 16.43%
Employers must withhold the employee's social contributions and make own contributions to the social security tax, this as well have several components. The highest combined employer potions are approximately 16.43%